By Shelly Melancon (Switzerland)
Bitfury CEO and ex-US Currency Comptroller, Brian Brooks, has explained that cryptos and internet stocks share some similarities. However, cryptos cannot be considered a currency. Brooks further said it is a false belief to assume that cryptos’ inability to replace the USD means they are failed projects.
Brooks spoke about the matter in a recent interview with CNBC at the Aspen Ideas Festival on June 27. The Bitfury CEO stated that the main objective of crypto is to be the system that replaces the current banking system. Unlike the current banking system, it is a decentralized network with no third-party controls.
Thus, fund holders are in control of their funds and not the banks. He further said crypto assets with tokens are like internet companies whose stocks are listed on the stock exchange. Many industry analysts fear that a long recession is due soon, following the current crypto market’s slump.
Hence, it is no surprise that many crypto and tech firms are no longer employing. Many of them, like Coinbase and Robinhood, are also letting some of their staff go. It is no wonder that industry experts predict that many digital tokens will soon collapse.
Last month’s crash of the LUNA and UST tokens may make their predictions a reality. According to various analytics, there are more than 19,000 digital currencies with multiple dozens of blockchains.
Investor’s Crypto Risk Exposure
Some industry players believe there are too many blockchain networks and digital assets in the crypto ecosystem. Hence, many users are confused about which is a scam and which is not. Thus, they expose themselves to huge risks in the name of investing.
According to these industry players, the situation is similar to the era of the internet boom. During that era, many dot-com firms were scams pretending to be legit companies. However, they couldn’t sustain their pretense, and the system flushed them out.
Hence, most of the ones in existence are valuable. Brooks also said that the crypto market slump hadn’t stopped bitcoin from performing better than the S&P 500. According to him, bitcoin has outperformed the S&P 500 five-fold.
Nevertheless, BTC is still down 56.5% in its YTD performance. The Bitfury CEO explained that cryptos had dominated the investing space so much that there was no single session during this aspen event on the “US Equities Outlook.”
Tokens’ Value And Stablecoins
Brooks then explained what makes tokens valuable. According to him, the adoption rate of the underlying technology of a token determines its value. For example, BTC’s value would be higher once there are many consistent BTC transactions.
Hence, the BTC price can’t remain static as more people will keep using it. Brooks also said this explanation is also true for other cryptos. The value a token’s network provides drives such tokens’ price.
Brooks also spoke on stablecoins. He said stablecoins are like bank deposits but without minimum balance or fees. Transaction and maintenance fees are examples of such fees. According to Brooks, stablecoins would affect low-income residents in the US more than any other crypto.
At Tokenhell, we help over 5,000 crypto companies amplify their content reach—and you can join them! For inquiries, reach out to us at info@tokenhell.com. Please remember, cryptocurrencies are highly volatile assets. Always conduct thorough research before making any investment decisions. Some content on this website, including posts under Crypto Cable, Sponsored Articles, and Press Releases, is provided by guest contributors or paid sponsors. The views expressed in these posts do not necessarily represent the opinions of Tokenhell. We are not responsible for the accuracy, quality, or reliability of any third-party content, advertisements, products, or banners featured on this site. For more details, please review our full terms and conditions / disclaimer.